Bankrupt Crypto Exchange Now Under Criminal Probe

November 13, 2022 Business, Scandal

Reuters reports:

The collapse of FTX is the subject of scrutiny from investigators in the Bahamas, who are looking at whether any “criminal misconduct occurred,” the Royal Bahamas Police said on Sunday. FTX filed for bankruptcy on Friday, one of the highest profile crypto blowups, after traders rushed to withdraw $6 billion from the platform in just 72 hours and rival exchange Binance abandoned a proposed rescue deal.

The exchange’s dramatic fall from grace has seen its 30-year-old founder Sam Bankman-Fried, known for his shorts and T-shirt attire, morph from being the poster child of crypto’s successes to the protagonist of the industry’s biggest crash. The turmoil at FTX has seen at least $1 billion of customer funds vanish from the platform. Bankman-Fried had transferred $10 billion of customer funds to his trading company, Alameda Research.

Yahoo Finance reports:

CoinDesk unearthed more secrets about the inner workings of Bankman-Fried’s crypto empire, including the untraditional makeup of his inner circle. “The whole operation was run by a gang of kids in the Bahamas,” CoinDesk reported, citing a source who was familiar with the matter.

Those sources told CoinDesk that both operations were run by Bankman-Fried’s inner circle of 10 roommates.

All of them either are — or have been — paired up in romantic relationships with one another, CoinDesk reported. The consensus among all the sources was that “It’s a place full of conflicts of interest, nepotism and lack of oversight,” CoinDesk reported.

Market Watch reports:



Former FTX CEO Sam Bankman-Fried lost his entire $16 billion fortune in just a few days after his company filed chapter 11 bankruptcy protection on Friday, but he’s not the only high-profile investor who may lose money amid FTX’s downturn.

As interest in crypto and crypto exchanges exploded in recent years, more high profile individuals like professional athletes and other entertainment personalities joined financial institutions in investing in FTX. One of those athletes is Tampa Bay Buccaneers quarterback Tom Brady.

Just a few months after winning his seventh Super Bowl in 2021, Brady and his then-wife Gisele Bündchen were each given equity stake in FTX, in addition to receiving some crypto. Brady served as an ambassador for the company and Bündchen was FTX’s Environmental & Social Initiatives Advisor.

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